-5.90(-0.44%)

-249.36(-1.75%)

+0.0030(+0.4654%)

-0.0007(-0.0611%)

+61.98(+0.77%)

Broad sell off sends share market lower

The share market closed weaker as all sectors outside of telcos lost ground, and the Australian dollar has fallen to a two month low.

The benchmark S&P/ASX200 stock index dropped 0.5 per cent to 5,701.4 points, and optionsXpress market analyst Ben Le Brun said there was no single factor behind the broad sell-off.

"It has been a really disappointing day after having turned a corner on Friday, coupled with a good session on Monday," Mr Le Brun said.

"Today it has all fallen into a heap for no apparent reason."

The energy sector was a poor performer after US oil prices dropped more than two per cent overnight on expectations of higher supplies.

Woodside Petroleum and Santos each dropped by one per cent and Oil Search fell by 0.6 per cent.

Insurance giant QBE was another weight on the market, dropping 36 cents, or 3.5 per cent, to $9.82 after it said recent hurricanes and an earthquake in Mexico would deliver a pre-tax hit to earnings of about $US600 million.

The major banks lost ground in afternoon trade after a steady morning of trade, with Commonwealth Bank the worst of the big four, falling 1.6 per cent.

Mr Le Brun said bargain hunters were probably behind gains among the telcos, with Telstra adding 0.3 per cent to $3.47 and TPG Telecom gaining 1.4 per cent to $4.98.

The mining sector was weaker but some of the major companies gained ground, with Rio Tinto up 0.7 per cent, BHP Billiton up 0.1 per cent Fortescue Metals 0.6 per cent firmer.

Mr Le Brun said the Reserve Bank's decision to keep the cash rate at the record low of 1.5 per cent was widely expected, but governor Philip Lowe's statement caused the Australian dollar's fall.

The local currency dropped below 78 US cents for the first time since mid-July, as economists said the statement indicated the chances of a sooner-than-expected rate hike had diminished.